Financial autonomy’s mechanism of public non-business units

On September 16, 2022, the Ministry of Finance issues Circular No. 56/2022/TT-BTC guiding a number of contents of financial autonomy of public non-business units; processing assets and finance upon reorganization or dissolution of public non-business units.

Accordingly, public non-business units are classified in accordance with financial autonomy prescribed in Article 9, Decree No. 60/2021/ND-CP, including:

  • A public non-business unit that can cover its regular expenses and investment expenses (group-1 unit);
  • A public non-business unit that can cover its regular expenses (group-2 unit).
  • A public non-business unit that can self-cover part of its regular expenses (group-3 unit); group-3 units shall be classified into:
    • Units that can cover between 70% and under 100% of their regular expenses;
    • Units that can cover between 30% and under 70% of their regular expenses;
    • Units that can cover between 10% and under 30% of their regular expenses.
  • Public non-business units with regular expenses covered by the State (group-4 units)
    • Public non-business units having a level of self-coverage of regular expenses determined according to Article 10 of under 10%;
    • Public non-business units have no revenues from non-business activities.

Public non-business units shall formulate their financial autonomy plans; propose the classification of their financial autonomy levels; make revenue-expense estimates of the first year in accordance with Clause 1, Article 35 of Decree No. 60/2021/ND-CP; report to the management agencies (group-1 unit).

Financial autonomy’s mechanism of public non-business units
Financial autonomy’s mechanism of public non-business units (Illustration)

From the financial autonomy plans from the public non-business units, the competent agencies shall summarize and verify the financial autonomy classification plan and estimates for affiliated units, and then submit them to the finance agencies for consideration.

Besides, Circular 56/2022 also explains the revenues based on revenue-expense estimates at the plan of financial autonomy, ability to pay, or objective impacts from disasters, diseases, and extraordinary social and economic changes.

This Circular takes effect on November 01, 2022.

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